Effects of Public Hospital Reform on Inpatient Expenditures in Rural China

Abstract

Public hospital reform is one priority area in the healthcare system reform that China launched in 2009. The Chinese government invested over $10bn for pilot projects in public hospital reform in rural China. However, little evidence exists on their effects. Using a quasi-natural experiment design, we evaluated the effects of a public hospital pilot project in Hubei province on inpatient spending. We obtained inpatient claims data from 1/1/2011 through 6/30/2013 for enrollees in the New Cooperative Medical Scheme in two counties: Danjiangkou, one of the pilot counties selected for reform in September 2012, and Laohekou, a similar, adjacent county serving as the control group. Using a difference-in-differences approach with propensity score weighting, we found that total inpatient spending increased ¥1160 (95% CI 1155-1166), out-of-pocket spending increased ¥385 (95% CI 382-389), length of stay increased 0.51 days (95% CI 0.50-0.52), but inpatient medication spending decreased ¥147 (95% CI 145-150), post-policy in Danjiangkou, relative to the control group. The overall reimbursement rate increased by 5.7 percentage points. One of the goals of the recent public hospital reform is to make inpatient services affordable to patients. We found that although patients spent less on inpatient medications, total out-of-pocket spending increased considerably after reform. Copyright © 2016 John Wiley & Sons, Ltd.

China's Health Reform Update

“…Implementation of the EDL reduced medication prices, especially for proprietary brands, and reduced drug expenditures per visit (8,19,78,80,90,93). In a quasi-experimental survey analysis of 55,800 prescriptions in primary care facilities in Hubei province, implementation of the EDL decreased the average cost per prescription [from 26.67 RMB to 44.67 RMB ($4.13-$6.93)] but did not reduce either prescription of antibiotics or parenteral drug delivery (79).…”

“…Although early studies suggest decreases in inpatient spending due to EDL implementation (92), later studies suggest an increase in overall spending. In a comparison of two counties in Hubei province, total OOP payments and inpatient spending increased by 5.66% and 28.7%, respectively (93), which suggests that health care facilities and providers shift services to make up for income lost from drug reform. In the same study, average physician service charges and therapeutic service charges increased by 137 RMB and 550 RMB ($21.00 and $85.27), respectively (93).…”

“…In a comparison of two counties in Hubei province, total OOP payments and inpatient spending increased by 5.66% and 28.7%, respectively (93), which suggests that health care facilities and providers shift services to make up for income lost from drug reform. In the same study, average physician service charges and therapeutic service charges increased by 137 RMB and 550 RMB ($21.00 and $85.27), respectively (93). This pattern of decreasing fiscal dependence on drug revenue and increasing dependence on other services and government subsidies is also found in other provinces (75,90) and in national studies of claims data (82).…”

Comparison of Inpatient Distribution among Different Medical Alliances in County Region: a Longitudinal Study on a healthcare reform in Rural China

“…We collected the data from the NCMS database of 322,521 inpatient medical records in Y County, which NCMS only had claims for those rural residents in the county and not for those residents who live in the county but had urban ID registration. Urban residents obtain their health insurance through urban resident or employee medical insurances [18].…”

Deregulation and pricing of medical services A policy experiment based in China

“…Further, as the hospital's agent, a doctor must not only provide diagnoses for patients but also generate income for the hospital and satisfy other assessment indicators of the hospital. However, while acting as agents, doctors may feel con icted when their personal interests contradict patients' interests [21][22][23][24][25]. For example, Lu [26] pointed out that when offered economic incentives, doctors might deviate from their agent obligations and use information advantages to induce patients with a strong ability to pay to pay for more medical services to maximize their personal interest.…”